Important Oregon Supreme Court Opinion on Negligent Construction
In what appears to be the final word on claims for negligent construction, the Oregon Supreme Court ruled last week that such claims must be brought within two years of "discovery." In Goodman v. Kingman Plastering, Inc. (2016), the Supreme Court effectively overruled Riverview Condo. Ass'n v. Cypress Ventures (2014), a recent (lower) Court of Appeals case that ruled that negligent construction claims needed to be brought within six years of discovery.
In finding that a two-year as opposed to a six-year discovery rule applied, the Court resolved a long standing dispute over which statutory provision applies: ORS 12.110(1), long understood to apply to tort actions generally, or ORS 12.080(3), which applies to claims relating to "an interest" in real property. Based on the technical definition of "interest", as well as other indicators, the court ruled that the general provision in ORS 12.110(1) and the two year statute of limitation applied.
The result of Goodwin is that negligent construction claims in Oregon must be brought within two years of when the injury or damage complained of was discovered or should have been discovered. What do "discover" or "should have discovered" mean in the context of Goodwin and other Oregon cases? Unfortunately, it's complicated and often dependent on the facts involved in a specific case or claim. One thing to always remember, statute of limitation problems, by their nature, never get better with delay. Even if you think you have time, it is important to act quickly if you suspect you might have a claim. Statute of limitations analysis can be complicated and the advice of qualified counsel is important to protect your rights.
As I have cautioned in prior posts, be aware that an opposing party will seize on any evidence of construction defects, leaks, mold etc. to persuade a court that claims were known or should have been known, and that the limitations period has been triggered. An association need not necessarily have completed a building investigation to "know." A single complaint from an owner about a window leak may lead to a dispute as to whether of not the Association was on "notice" of facts supporting their claim. These issues can be avoided completely by timely asserting your rights. Also keep in mind that there may be other potentially available claims governed by other statutes of limitations. For example, contract actions may be maintained for up to six years, with perhaps a still open question as to whether a discovery rule applies.
Feel free to contact me or one of the other attorneys at Barker Martin if you have a question relating to your rights and the time you or one of your communities has to bring claims